The expression “New Economy” hadn’t even been coined, still less had its modern day equivalents – the internet economy, the knowledge based economy, and the others.All the excitement of the digital age, with its mind boggling implications for the way business is conducted and products are sold, was yet to come, and so was the investment bubble that accompanied it The dot boom was always only a minor part of it Everyone knew that the dot s were a one off, crazy hype If it had stopped there, the damage would have been limited. But then big, established business too began to get with the beat and lose its marbles.The moment of truth for this column was at a lunch with a senior British Telecom executive when he began to speak, apparently in all seriousness, about the City’s desire to see the dividend either cut or disappear entirely so as to allow more investment in the then boom businesses of mobile telephony and data transmission infrastructure. Whether the City actually wanted such a thing scarcely seemed to matter. The executive’s perception of what was expected of him – never mind the profit, just spend the money – was certainly in tune with the spirit of the times.During those mad, glorious years, business and the City seemed almost wholly to lose sight of the old fashioned virtues of profit, customers and customer service. A vast new landscape of unclaimed territory seemed to lie just beyond the horizon, and the spoils would go to those that could get there first.No one was immune to the madness.

Even BSkyB, whose final victory in the battle for digital TV in Britain was confirmed this week with ITV Digital’s administration, had its moments. Open, the company’s interactive on-line shopping mal, proved a spectacular waste of money, though parts of it are now turning a profit. Likewise, the acquisition of Sports Internet Group, bought at the height of the dot boom, was largely money down the drain. Deep pockets and an existing monopoly of pay TV ensured that when the war for digital TV subscribers began, it was better prepared than ITV to take the pain and claim the territory.Perhaps appropriately, the New Economy partying continued for a full three months into the new century before the technology bubble finally burst and reality dawned Yet pockets of madness persisted. One was ITV Digital, which as late as June 2000 paid £315m for rights to televise Football League games, even though the battle with Sky had already by that stage been largely lost. Another was the European auctions for 3G mobile telephone licences.As it happens, this particular madness was as much the fault of the British Government as half crazed telecom executives.

Gordon Brown, the Chancellor, thought he was being frightfully clever in applying “games theory” to the auction process, but the end result has been to benefit no one. The auction worked on the basis that proceeds could be most effectively maximised by limiting supply. Since the mobile incumbents knew they would be dead in the long term unless they secured some of the scarce resource on offer, they were obliged to take part and the whole process inevitably became one of beggar thy neighbour.When this column wrote before the auction began that some wild voices in the City thought the bidding might go to £5bn, there were gasps of disbelief all round. In the end it yielded five times that amount and Mr Brown was hailed as a genius.